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16 August, 15:12

2. Why are accounts receivable considered assets even if the money has not yet been paid to the business?

O Accounts receivable is a synonym for "asset."

O Businesses can count potential income as assets.

Any transaction is an asset once it is complete.

The payee has a legal obligation to submit the funds.

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  1. 16 August, 15:34
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    The payee has a legal obligation to submit the funds.

    Explanation:

    Once a transaction is agreed upon it becomes a legal obligation of the payee to pay the business owner.

    Accounts receivable are thus counted in the balance sheets as liquid funds or current funds as they are converted into cash in less than an year is most cases.

    In such a case that doesn't happen, they are counted as long term assets of a company. Any potential income guaranteed by legality is counted in the balance sheet as assets.
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